The United States has an absolute advantage in producing T-shirts,but not a comparative advantage,because
A)Another country may have an absolute advantage in producing T-shirts.
B)The United States uses fewer resources to produce T-shirts than another country can
C)Other countries,such as China,can produce T-shirts at a lower opportunity cost relative to the United States.
D)Labor costs in the production of T-shirts are lower in the United States than in other countries.

Question

Quizplus · Accepted Answer

Comparative advantage is based on the opportunity cost of producing a good. If a country can produce a good at a lower opportunity cost than another country, it has a comparative advantage in producing that good. Other countries, such as China, can produce T-shirts at a lower opportunity cost relative to the United States, so the United States does not have a comparative advantage in producing T-shirts.

The United States Has an Absolute Advantage in Producing T-Shirts,but